Win at Gambling? The Taxing Consequences - Tax tip of the week

You may know when to hold ‘em and when to fold ‘em but do you how and when to report ‘em?  Here are the rules:

• All gambling winnings are fully taxable.  Note:  more and more cities are also making gambling winnings taxable income.
• Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, poker tournaments and casinos.  It includes cash winnings and also the fair market value of prizes such as trips or cars.
• A payer is required to issue you a Form W-2G if you receive winnings over a certain level or if you have federal taxes withheld.  Note:  the Indiana riverboats will issue a W-2G if you win more then $1,200 at a slot machine; they will also withhold Indiana state taxes.
• Gambling losses are deductible up to the amount of gambling winnings claimed.  You can never deduct losses in excess of the winnings.
• You must be able to prove your gambling losses.  Be sure to keep records and receipts to prove the amount you lose.

Special note:  Even though gambling losses are deductible on your federal return, there is no way to deduct them on your state or local return.  Also, if you do have state taxes withheld from a state other then Ohio, make sure you file a tax return with that state so that you don’t pay taxes on that income a second time on the Ohio return.Good luck at the slots and tables but remember---the government always comes out a winner!Call us with any questions. In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com....until next week.